Social Enterprises

Outside the traditional not-for-profit world a new breed of organizations is showing that making a difference is not necessarily incompatible with making money. Called “social enterprises” these organizations align themselves with an environmental or social goal which becomes part of their business model.

One such enterprise, called Zerofootprint, operates in three broad areas – enterprise carbon management software, development of carbon offsetting project and community engagement around climate change. The last part of the business is a not-for-profit venture that leverages the software and carbon offset units to run projects such as a green building innovation competition or an initiative to use carbon calculators to engage citizens. In practice, the various parts of the organization seamlessly work together to achieve the company’s goals, although technically the not-for-profit arm needs to be kept separate as social enterprises do not yet have legal status.

Another social enterprise, called Virgance, strives to change the world through activism campaigns all the while making a profit. The company uses its social media infrastructure to organize projects that make a positive social or environmental impact. Outside of Carrotmob, an initiative to use the power of consumers to influence businesses, Virgance runs a series of community based group purchasing programs to drive down the cost of solar panels. Other projects include Go Media, a network of green blogs, and the newest called Lend which organizes contests around social entrepreneurship. According to the founders the key in reconciling the for-profit motive with the activist goals is “full and total transparency.”

Other examples of social enterprises include Fairtrade drinks company Cafedirect, office equipment recycler Green-works and a U.K. based magazine called The Big Issue. One could argue that any company that is performing a service or creating a product that is broadly accepted to be good for society can be called a social enterprise. This definition could include any organization from a recycling company to a for-profit hospital network. On the other hand purists would argue that a for-profit motive is inherently incompatible with social good as the financial imperative will always come first. The debate is likely to continue for some time, but the emergence of organizations that are applying the management practices of for-profit companies to businesses with a positive social or environmental impact is certainly a good one.

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